Investments and 1.5 million jobs may be lost should the government push through rationalizing incentives under the Tax Reform for Attracting Better and High-Quality Opportunities (TRABAHO) bill, various business groups said Thursday.
“To remove or even dilute tax incentives granted to locators now would risk the loss over time of millions of jobs and investments that would otherwise have been committed to the Philippines,” the business groups said in a statement.
The joint statement was issued by the Philippine Ecozones Association (PHILEA), the Semiconductor and Electronics Industries in the Philippines Foundation Inc., the IT and Business Process Association of the Philippines (IBPAP), and the Confederation of Wearable Exporters of the Philippines (CONWEP).
The government’s plan to rationalize tax incentives would compel companies to invest somewhere else other than the Philippines.
The TRABAHO bill or the second package of the government’s comprehensive tax reform program aims to make tax perks time-bound, transparent, targeted and performance-based for a more competitive fiscal incentives system.
“If TRAIN 2 is pushed the way it is, they (businesses) will probably stay here for a year or so, and then they’re out,” said PHILEA president Felix Francisco Zaldarriaga.
“What concerns us really are the jobs that are laid out to the industries. We’re talking about 1.5 million jobs,” he said.
However, the DOF earlier said it expected the tax measure to generate 1.4 million jobs—mostly in small and medium enterprises (SMEs)—over the next decade.
Finance Secretary Carlos Dominguez noted SMEs are expected to expand their businesses and hire more workers because of the tax cuts.
The business groups said they are willing to work with Congress to address such issues.
“We stand ready to engage policymakers in constructive dialogue that will result in a brighter future for our country,” their statement read.
“As the 18th Congress is set to convene, we look forward to working with lawmakers and the executive to enact legislation that will allow the country to employ more workers, attract more investments, and increase the government’s tax revenues,” it added. —VDS, GMA News